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Moody's predicts ongoing boom in European private credit

A recent Moody's report suggests continued growth in European private credit markets despite recent slowdowns. Anticipated inflows this year, driven by adjustments to higher rates and increased retail investor participation, highlight the sector's resilience.

European private credit has outpaced the US market over the past decade, buoyed by regulatory changes like ELTIF regulations. Flexible offerings and execution certainty have attracted diverse investors, although rising default risks remain a concern.

Looking ahead, Moody's predicts diversification in European private credit strategies, mirroring US trends. Asset-backed finance, including hybrid debt-equity financing, presents significant opportunities for growth.

In summary, the report underscores the enduring appeal and evolving landscape of European private credit, poised for further expansion despite challenges.

Moody’s has predicted an ongoing boom in European private credit, despite a recent slowdown in issuance and funding. In a new report, the ratings agency said that it expects strong inflows to resume this year as the market adjusts to the new normal of higher rates, and more retail investors enter the space. It was noted that the European and UK corporate private credit market have been growing at an average rate of 21 per cent per annum over the past decade. This compares with a 14 per cent average annual growth rate in the US.


private credit, asset based finance, private markets, asset & wealth management, real assets

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